Examples of Money Laundering: Placement, Layering, Integration

Examples of money laundering fall into recognizable patterns that law enforcement has tracked for decades, and nearly all of them fit into a three-stage sequence: placement (getting illegal cash into the financial system), layering (disguising the money trail), and integration (bringing the funds back as apparent legitimate income).¹ The specific techniques range from splitting up bank deposits to multi-country trade fraud, but they share the same goal of making illegally obtained money look like it came from a legitimate source.

The stages don’t always run neatly one after another. A single transaction can serve placement and layering at the same time, and sophisticated operations blur the lines constantly. Still, the framework is a useful way to group the examples that follow.

Placement Examples: Moving Dirty Cash Into the System

Structuring (Also Called Smurfing)

Federal law requires banks to file a Currency Transaction Report for any cash transaction over $10,000.² Structuring is the deliberate practice of breaking large amounts into smaller deposits to stay under that threshold. Instead of one deposit of $56,000, a launderer makes seven deposits of $8,000. Some operations use multiple people, called “smurfs,” to make deposits at different branches or different banks on the same day.

Structuring is itself a federal crime, even if the underlying cash is legal. A conviction carries up to five years in prison, and up to ten years if the conduct involves more than $100,000 over a twelve-month period or accompanies another federal offense.³

Cash-Intensive Businesses

Restaurants, car washes, laundromats, and parking garages make convenient vehicles for placement. A launderer who owns or controls such a business can inflate the daily receipts, reporting $15,000 in sales on a day the business actually brought in $6,000, and deposit the combined total without raising suspicion. The illegal cash blends invisibly with the legitimate revenue.

Casinos draw particular attention from regulators. Drug trafficking proceeds and fraud money are regularly converted to chips, played briefly, and cashed out as “gambling winnings.”⁴

Monetary Instruments and Prepaid Cards

Another entry point is converting cash into cashier’s checks, money orders, or prepaid debit cards. These instruments can then be deposited, mailed across the country, or used directly for purchases. Because they aren’t raw cash, they attract less scrutiny at the deposit stage, though banks are increasingly trained to flag patterns involving large volumes of monetary instruments.

Bulk Cash Smuggling

Sometimes placement skips the domestic banking system entirely. Physically moving undeclared currency across U.S. borders in luggage, vehicles, or shipping containers is a federal offense when done to evade reporting requirements. A conviction carries up to five years in prison, and the government can seize the cash, the vehicle used to transport it, and any property traceable to the offense.⁵

Layering Examples: Hiding the Money Trail

Shell Companies

Shell companies exist on paper but have no real operations, employees, or assets. They’re often registered in jurisdictions where ownership information is difficult to obtain. A launderer routes money through one or more shells using fake invoices for services never rendered, and each transfer creates another layer of apparent legitimacy.⁶

A FinCEN case study shows how far this can go. Funds from undercover accounts were wired to shell accounts at a Central American bank, then transferred through another U.S. bank to a foreign institution, then used to purchase certificates of deposit. Those CDs were pledged as collateral for loans at yet another foreign bank, and the loan proceeds were wired back to the original owner’s account, having passed through enough institutions and instruments to look clean.¹

International Wire Transfers

Moving money electronically between accounts in multiple countries, particularly countries with weaker anti-money laundering controls, is one of the most common layering techniques. Each cross-border transfer adds jurisdictional complexity that slows investigators.⁷ A launderer might wire funds from a U.S. bank to an account in one country, then to a second country, then back to a different U.S. account, with each hop passing through a different shell company or nominee account.

Trade-Based Money Laundering

Trade-based laundering exploits international commerce to move value across borders without moving currency at all. The Financial Action Task Force defines it as disguising criminal proceeds by misrepresenting the price, quantity, or quality of imported or exported goods.⁸ The common variants:

Over-invoicing. An importer pays more than the goods are worth, and the exporter keeps the excess as a covert transfer disguised as a trade payment.
Under-invoicing. An exporter ships goods worth far more than the invoice states, and the importer sells them at full market value and pockets the difference.
Ghost shipments. Invoices are created for goods that never existed. Money moves between buyer and seller as though a real transaction occurred.
Multiple invoicing. A single shipment generates several invoices sent to different financial institutions, making it harder to identify which payment is legitimate.

ICE estimates that customs fraud tied to these schemes cost worldwide customs organizations approximately $9 trillion between 2008 and 2017.⁹

Integration Examples: Bringing the Money Back Clean

Real Estate

Real estate is arguably the single most popular integration vehicle. High-value properties absorb large sums in one transaction, and the market has historically offered more anonymity than banking. Launderers use LLCs, trusts, and partnerships to purchase property without revealing their identities. All-cash purchases are particularly attractive because they bypass the anti-money laundering checks that mortgage lenders perform.⁴ A FinCEN rule taking effect December 1, 2025, will require settlement agents, title insurance agents, and attorneys to report non-financed transfers of residential real estate to legal entities or trusts, including the beneficial owners of the purchasing entity.¹⁰

Loan-Back Schemes

The loan-back is a classic integration technique. A launderer deposits illegal funds in an offshore bank or shell company, then borrows against those same deposits. The loan proceeds arrive in a domestic account as seemingly legitimate borrowed money. The launderer may even make scheduled “repayments” to the offshore entity, creating a full paper trail that looks like an ordinary commercial loan. That’s exactly where the FinCEN case study above ended: CDs bought with layered funds were used as collateral for loans that were then wired back to the criminal’s account.¹

Front Businesses and Fake Invoices

Investing in a real, operating business is another path. The launderer injects illicit capital as a supposed investment or loan, and the business pays them back through salaries, consulting fees, or profit distributions. A variation uses front companies to generate fake invoices: Company A bills Company B for consulting work that never happened, and the payment appears on both sets of books as a routine business expense. This works especially well across borders, where verifying that services were actually performed is difficult.

Industries That See the Most Laundering

Casinos and Gambling

Casinos handle enormous cash volumes daily, and the typical pattern involves converting illicit cash to chips, gambling minimally, and cashing out. The receipt or check for “gambling winnings” gives the money a plausible origin story. Federal law requires casinos to file CTRs and maintain anti-money laundering programs, but transaction volume creates opportunities for abuse.⁴

Art and Antiquities

The high-end art market checks several boxes for launderers. Individual transactions can involve millions of dollars, the market has a long tradition of private sales, and buyers and sellers frequently use intermediaries, shell companies, and trusts to remain anonymous.⁴ Congress addressed part of this vulnerability in the Anti-Money Laundering Act of 2020, which added antiquities dealers to the Bank Secrecy Act’s definition of “financial institution.” Once final rules take effect, those dealers will face the same reporting and recordkeeping obligations as banks.¹¹

Cryptocurrency

Virtual assets offer speed, cross-border reach, and, in some cases, more anonymity than traditional banking. Some virtual assets allow near-instantaneous transfers with no financial institution in the middle, and anonymity-enhancing technologies like mixers and tumblers can further obscure fund movement.⁴

FinCEN treats cryptocurrency exchanges and administrators of convertible virtual currencies as money transmitters, meaning they must register with FinCEN, maintain anti-money laundering programs, and file suspicious activity reports.¹² The “travel rule” also applies. For any funds transfer of $3,000 or more, the transmitting institution must pass identifying information about the sender and recipient to the next institution in the chain.¹³

Federal Penalties for the Conduct in These Examples

Federal law treats money laundering as a serious felony, and the penalties escalate depending on the amounts involved and the underlying criminal activity. Two main statutes cover the offense.

Under 18 U.S.C. § 1956, the primary money laundering statute, conducting a financial transaction with proceeds of illegal activity — knowing the funds are dirty and intending to promote the crime or conceal the money’s origins — carries up to 20 years in prison and a fine of $500,000 or twice the value of the property involved, whichever is greater.¹⁴ Conspiracy to commit the offense carries the same penalties.

A companion statute, 18 U.S.C. § 1957, targets anyone who knowingly engages in a financial transaction involving more than $10,000 in criminally derived property. The maximum is ten years in prison. Prosecutors don’t need to prove the defendant knew which specific crime generated the money, only that the defendant knew the property was criminally derived.¹⁵

Beyond prison time, forfeiture is close to automatic. Courts must order criminal forfeiture of any property involved in a money laundering offense, or any property traceable to it.¹⁶ The government can also pursue civil forfeiture, which allows seizure of assets even without a criminal conviction.¹⁷ A launderer can lose the real estate, vehicles, bank accounts, and any other property connected to the scheme.

Almost every example above shares one feature: it exists to avoid triggering at least one federal reporting requirement. Structuring exists because of the $10,000 CTR threshold. Shell companies exist because ownership reporting is thin in some jurisdictions. Cash-based real estate purchases exist because mortgage lenders run the checks that cash buyers skip. When investigators unwind a laundering scheme, they usually work backward through the same reports the launderer was trying to dodge.

1
Financial Crimes Enforcement Network. Money Laundering Prevention – A Money Services Business Guide
2
FinCEN.gov. A CTR Reference Guide
3
Office of the Law Revision Counsel. 31 U.S. Code 5324 – Structuring Transactions to Evade Reporting Requirement
4
Department of the Treasury. 2022 National Money Laundering Risk Assessment
5
GovInfo. 31 USC 5332 – Bulk Cash Smuggling Into or Out of the United States
6
Financial Crimes Enforcement Network. Potential Money Laundering Risks Related to Shell Companies
7
FFIEC BSA/AML InfoBase. Risks Associated with Money Laundering and Terrorist Financing – Funds Transfers
8
FATF. Trade-Based Money Laundering
9
ICE (Immigration and Customs Enforcement). Cornerstone Newsletter 61 – February 2025
10
Financial Crimes Enforcement Network. FinCEN Residential Real Estate Fact Sheet
11
Federal Register. Anti-Money Laundering Regulations for Dealers in Antiquities
12
Financial Crimes Enforcement Network. Application of FinCENs Regulations to Virtual Currency Mining Operations
13
Financial Crimes Enforcement Network. FinCEN Advisory Issue 7 – Funds Travel Regulations Questions and Answers
14
Office of the Law Revision Counsel. 18 USC 1956 – Laundering of Monetary Instruments
15
Office of the Law Revision Counsel. 18 U.S. Code 1957 – Engaging in Monetary Transactions in Property Derived From Specified Unlawful Activity
16
Office of the Law Revision Counsel. 18 USC 982 – Criminal Forfeiture
17
Office of the Law Revision Counsel. 18 U.S. Code 981 – Civil Forfeiture